Median Home Prices See Modest 4% Annual Increase Nationwide
In November 2023, existing-home sales in the United States experienced a slight uptick, breaking a five-month streak of consecutive declines, as reported by the National Association of Realtors (NAR).
While sales increased in the Midwest and South, they declined in the Northeast and West regions. However, all four regions witnessed year-over-year decreases in sales activity.
Total existing-home sales, encompassing completed transactions of single-family homes, townhomes, condominiums, and co-ops, rose by 0.8% from October, reaching a seasonally adjusted annual rate of 3.82 million in November. Nonetheless, compared to November 2022’s figure of 4.12 million, sales declined by 7.3%.
Lawrence Yun, Chief Economist at NAR, attributed the recent weakness in existing home sales to the bidding process prevailing in October, when mortgage rates hit a two-decade high.
He anticipates a turnaround given the recent plunge in mortgage rates, offering a favorable outlook for the market.
Freddie Mac reported that as of December 14, the 30-year fixed-rate mortgage averaged 6.95%, dropping below 7% for the first time since August. This rate, though lower than the previous week’s 7.03%, remains higher than the 6.31% recorded one year ago.
Housing inventory by the end of November stood at 1.13 million units, representing a 1.7% decrease from October. However, it marked a 0.9% increase compared to the same period last year (1.12 million).
The unsold inventory translates to a 3.5-month supply at the current sales pace, a slight decrease from October’s 3.6 months but an increase from November 2022’s 3.3 months.
The median existing-home price for all housing types in November reached $387,600, marking a 4.0% increase from November 2022’s median of $372,700. Notably, all four regions of the United States observed price hikes.
Yun emphasized the continuous upward trajectory of home prices, underscoring that only a substantial surge in supply could alleviate the pressure on price appreciation.
Realtor Confidence Index: Market Dynamics in November
In November, properties lingered on the market for an average of 25 days, slightly longer than the previous month’s 23 days and matching the duration seen in November 2022. Notably, 62% of homes sold during the month were on the market for less than a month, underscoring the prevailing trend of swift transactions.
First-time buyers played a significant role in the market, accounting for 31% of sales in November. This marks an increase from both October 2023 and November 2022, where they represented 28% and 32% of sales, respectively.
These figures, gleaned from NAR’s 2023 Profile of Home Buyers and Sellers released in November, shed light on the continued importance of first-time buyers in driving market activity.
Meanwhile, all-cash sales comprised 27% of transactions in November, experiencing a slight decline from the previous month’s 29% but showing an uptick from November 2022’s 26%.
Among these cash transactions, individual investors or second-home buyers constituted a notable portion, purchasing 18% of homes in November. This figure represents an increase from both October 2023 and November 2022, where they accounted for 15% and 14% of sales, respectively.
Despite the evolving market dynamics, distressed sales, including foreclosures and short sales, remained relatively stable, representing only 1% of transactions in November.
This figure remains unchanged from the previous month and the same period last year, suggesting a consistent pattern in the market’s handling of distressed properties.
Single-family and Condo/Co-op Sales Trends
In November, single-family home sales saw a modest increase, reaching a seasonally adjusted annual rate of 3.41 million units. While this marks a 0.9% uptick from October’s figure of 3.38 million units, it represents a 7.3% decline compared to the same period last year.
Despite this, the median price for existing single-family homes continued its upward trajectory, reaching $392,100 in November. This reflects a 3.5% increase from November 2022, highlighting the sustained growth in single-family home prices.
Meanwhile, existing condominium and co-op sales remained steady, recording a seasonally adjusted annual rate of 410,000 units in November, identical to October’s figures. However, this figure represents a 6.8% decrease from the previous year.
Despite the decline in sales volume, the median price for existing condos saw a notable increase, reaching $350,100 in November. This marks an 8.6% rise from the previous year’s median price of $322,400, indicating robust price appreciation in the condo market.
Regional Real Estate Market Analysis
Northeast:
In the Northeast region, existing-home sales experienced a slight decline of 2.1% from October, reaching an annual rate of 470,000 units in November. This figure represents a more significant decrease of 13.0% compared to November 2022. Despite the dip in sales volume, the median price in the Northeast increased to $428,600, reflecting a 4.8% uptick from the previous year.
Midwest:
Meanwhile, the Midwest saw a slight uptick in existing-home sales, rising by 1.1% from the previous month to reach an annual rate of 940,000 units in November. However, this figure represents an 8.7% decrease from the same period last year. The median price in the Midwest climbed to $280,800, marking a 4.9% increase from November 2022.
South:
In the South region, existing-home sales showed a notable improvement, increasing by 4.7% from October to reach an annual rate of 1.77 million units in November. Despite this positive momentum, there was a decline of 4.3% compared to the previous year. The median price in the South also saw an increase, reaching $351,500, reflecting a 3.4% rise from the prior year.
West:
On the other hand, existing-home sales in the West experienced a significant decline of 7.2% from the previous month, reaching an annual rate of 640,000 units in November. This figure represents an 8.6% decrease from November 2022. Despite the decline in sales volume, the median price in the West rose to $603,200, marking a 5.3% increase from the previous year.
